The Bank of Canada has increased the target for its trend-setting overnight lending rate on July 20, raising it by a quarter of a percentage point to 0.75 percent. The increase follows on the heels of an equal interest rate increase in June 2010, when it was raised for the first time since 2007. The Bank rate now stands at one percent.
In its most recent interest rate announcement, the Bank marked down its outlook for economic growth globally, emphasizing the uneven economic recovery in the U.S. and weakening prospects for European economic growth.
In the Bank’s view, Canada’s domestic economy is largely evolving as expected in recent months, but it trimmed its forecast for economic growth this year and next by 0.2 percent to 3.5 percent in 2010 and 2.9 percent in 2011. While the Bank raised its forecast for Canadian economic to 2.2 percent in 2012, it nonetheless left the easing trend for growth intact.
The Bank indicates, “[this] revision reflects a slightly weaker profile for global economic growth and more modest consumption growth in Canada. The Bank anticipates that business investment and net exports will make a relatively larger contribution to growth.
“Where the domestic recovery had previously been led by housing and consumer spending it is now guided more by government stimulus.”
The Bank also reaffirmed its view that housing activity and household expenditures were pulled forward into the first half of 2010, which is expected to cause them to soften in the second half. It also recognized that business investment has been weaker than it previously expected, “held back by global uncertainties.” The Bank anticipates that “business investment and net exports will make a relatively larger contribution to growth” over its forecast horizon.
As of July 20, the advertised five-year conventional mortgage rate of 5.79 percent was down 0.06 percent from one year earlier, and 0.2 percent below where it stood when the Bank made its previous interest rate announcement on June 1. However, it is 0.3 percentage points higher than it was at the beginning of the year.
The Bank has signaled to financial markets that it is leaving its options open as to whether it will raise interest rates further when it makes its next rate announcement on September 8.
“As it did with its previous announcement in June, the Bank messaged financial markets that further interest rate increases are not pre-ordained,” says Gregory Klump, chief economist at the Canadian Real Estate Association. “The strength of recent economic indicators has prompted the Bank to raise interest rates, but the Bank has signaled that it may keep rates on hold should the economic recovery begin to show signs of losing steam.”
http://www.albertajobshark.com/
Auto Financing Edmonton Alberta
2011 Dodge Charger SRT8 Pricing Edmonton
- Increase in FDIC Limits? Who Cares? CNBC has highlighted the major pork add-ons in the 2nd bail out bill bumping it up to a slim 400 pages!  There is one that is getting a lot of press, but I am confused why.  CNBC highlights that, The Federal...
- How Depressed are Interest Rates? Some people love rate-chasing (even though it's not worth it), but these days, even looking is depressing. With interest rates at record lows and more people looking to save their money, banks have little to gain by providing high interest...
- US Inflation Much Higher Than Reported: Get Ready For 10% Inflation Today's post is an excerpt from a letter by Martin Hutchinson. He's done a great job of explaining why interest are so low and why inflation will probably run 10% pretty soon. Back in the early 1990s, the Fed and...
- It Pays To Wait, But Not with Interest Rates For those who like to say it pays to wait, they might want to put an asterisk next to that idiom when referring to interest rates. In today's world of quantitative easing and bond/credit traders wired to marketplaces at near...
